HDFC aims to issue one million credit cards per month

India’s largest private bank HDFC Bank Ltd. is targeting one million credit cards a month, a remarkable recovery for the lender after the country’s regulator banned it from accepting new card customers two years ago. The bank aims to double the current pace of half a million new card issuances per month, according to Parag Rao, Country Head for Payments Business, Consumer Finance, Digital Banking and Marketing. The company will announce partnerships in a range of industries from online retail to grocery delivery in the coming weeks to increase card spend, Rao said.

HDFC Bank’s recovery has been rapid since the eight-month card ban was lifted last August, with the lender trying to sidestep punishment for repeated online disruptions that hurt its customers. Data from the Reserve Bank of India showed that the bank accounted for 29 percent of India’s total credit card spend in October, the highest among its peers. “We don’t just focus on card issuance, which is a distribution game, but on a deep commitment to ensure customers find more value in their cards and keep spending,” Rao said in an interview.

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The partnerships over the next few weeks also include two airlines and a major hotel chain, according to Rao. HDFC Bank is in the final stages of developing a new digital credit card to attract younger customers, he added. Banks in the world’s second most populous country are poised to capitalize on the growth of online shopping, where customers use their credit cards to make purchases. According to a report by Bain & Co Inc., between 200 and 300 million Indians are expected to spend $50 billion on online retail this year.

Part of the push at HDFC Bank will coincide with its merger with Housing Development Finance Corp. which will give her access to the mortgage lender’s customers, Rao said. The two companies agreed to join forces this year in one of the largest global deals to handle a home loan and consumer spending boom in India.

Beyond partnerships, the bank also wants to attract more customers using credit cards from India’s local payments system, RuPay, according to Rao. He sees new rules that allow RuPay credit cards to be linked to the widely used government-backed payment interface expanding the market for these cards. “Credit lines for such customers will be small, but these will be customers of the future who can upgrade to other cards as they evolve,” Rao said. And while competitors offer bonuses on a range of products to attract customers, HDFC Bank avoids this strategy. “We’ve never had the best discounts out there, nor do we want to be known as the card with the most discounts,” Rao said.


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